SF Has Second Highest Construction Costs in the World

You might think that Tokyo has the highest construction costs on the planet. But, no. New York City holds that honor. And we in San Francisco are right behind the Big Apple for big construction costs. Our average per square foot is $330, according to a study done by Turner and Townsend construction consultants. Take an average apartment in San Francisco. It takes $425,000 to build one apartment. That is steep, and those high costs make worse our housing crisis with its sky high rents or huge dollops of public monies needed to be poured in to help with rents.

So, why are we the second in the world? In a nutshell, byzantine permitting process that often requires more and more permissions, building inspections that are not standardized or even codes that are not standardized, years-long labor shortages, and too-easy ways for opponents to delay projects.

There’s a real dearth of subcontractors and skilled workers in San Francisco, which in a labor short market drives up costs and causes delays in construction, which all translates into more expenses. Construction workers are leaving SF to cheaper cities to live in – a house in SF now costing a median $1.5 million.

Skip to content